Research subjects The research object of the thesis is the financial situation of Manabox Vietnam Co., Ltd., based on: Balance sheet, Business performance report, Cash flow report, Fina
The urgency of the subject
The financial reporting system is the most comprehensive report on the financial situation of the enterprise, on the business results of the enterprise after a business cycle Information from the financial reporting system is not only necessary for business managers but is also of interest to investors, state management agencies, employees, and competitors Therefore, analyzing the financial reporting system is a professional tool that effectively helps each of the mentioned in subjects above Depending on each subject, the content and analysis methods are different to suit the needs purpose
Manabox Vietnam Co., Ltd operates in the field of Accounting - Tax Especially in the coming period, when the Company expands its business, the financial statements, also known as prospectuses, will become comprehensive information with full legal nature for those outside the business to pay attention to analytical mind Therefore, analyzing the reporting system of Manabox Vietnam Co., Ltd to evaluate the financial situation as well as the Company's future capabilities is very necessary
It is for the above reasons that I chose "Analyzing financial statements for
2021 - 2023 to improve the financial situation of Manabox Vietnam Co., Ltd." as my thesis topic.
Suspected target
- Research theoretical issues about the content of annual financial report analysis;
- Analyze financial statements of Manabox Vietnam Co., Ltd.;
- Point out practical solutions to strengthen financial management at Manabox Co., Ltd in the current period.
Research question
- What criteria should be applied in analyzing financial statements of Manabox Vietnam Co., Ltd.?
- What is the financial situation of Manabox Vietnam Co., Ltd in 2021 - 2023?
- What are practical solutions to strengthen financial management at Manabox Vietnam Co., Ltd in the current period?
Object and scope of the study
The research object of the thesis is the financial situation of Manabox Vietnam Co., Ltd., based on: Balance sheet, Business performance report, Cash flow report, Financial statement notes main b Research scope
- Spatial scope: The project was carried out at Manabox Vietnam Co., Ltd
- Time scope: Analyze financial statements of Manabox Vietnam Co., Ltd in the period from 2021 - 2023
- Content: Analyze and evaluate the financial statements of Manabox Vietnam Co., Ltd., thereby presenting solutions to improve the financial situation of the enterprise.
Research Methods
- Data collection method: Collect statistics from financial reports such as business activities, capital scale, and revenue of enterprises through the years 2021 -
- Data analysis and processing: including synthesis analysis, ratio analysis, coefficient comparison, inference synthesis, Dupont analysis
+ Research, calculate and compare the studied indicators over time and between the actual period of analysis and the previous business period to determine the trend of fluctuations in the financial activities of the enterprise Research to evaluate the growth or decline rate of financial activities of enterprises
+ Research and compare vertically and horizontally using ratios and coefficients to show the correlation between indicators in each financial report and between the Company's financial reports Vertical analysis of financial statements analyzes changes in structure or proportional relationships between indicators in the Company's financial reporting system
+ The ratio analysis method analyzes the meaning of the ratios between a specific indicator in the report and one or more other indicators The selection of analysis target groups and the level of each group depends on the analysis objectives and each specific period Additionally, the Dupont analysis model can be applied to further analyze the correlation between these ratios and the problem being analyzed.
Structure of the thesis
Chapter 1: Theoretical basis for analyzing corporate financial statements Chapter 2: Analyzing financial statements of Manabox Vietnam Co., Ltd Chapter 3: Solutions to improve the financial situation of Manabox Vietnam Co., Ltd
Research gap
Lack of focus on emerging markets like Vietnam: Research has not adequately focused on emerging markets such as Vietnam, resulting in a lack of information and understanding about the specific financial situations of businesses in this business environment
Limited application of advanced analytical techniques: This limitation leads to missed opportunities in utilizing newer, more advanced analysis methods to improve the accuracy and effectiveness of financial statement analysis
Limited focus on Small and Medium-sized Enterprises (SMEs): Current research primarily concentrates on large publicly listed companies, neglecting the practicalities and challenges encountered by SMEs This study aims to fill this gap by analyzing the financial statements of Manabox Vietnam Limited Liability Company, an SME in the Vietnamese market
In conclusion, by focusing on the financial analysis of Manabox Vietnam, the research sheds light on the specific challenges faced by small and medium-sized enterprises (SMEs) operating in emerging markets like Vietnam Through the application of advanced analytical techniques and consideration of non-financial factors, the study provides a comprehensive analysis of the company's financial performance The findings offer valuable insights and recommendations to enhance the financial management and operational efficiency of Manabox Vietnam, thereby contributing to its sustainable growth and development in the Vietnamese market.
Concepts, Objectives, and Significance of Financial Statement
2.1.1 Concept of Financial Statement Analysis
There have been various perspectives on the concept of financial statement analysis, including:
Financial statement analysis is the process of evaluating and drawing conclusions about the financial position and business performance of a company based on the financial statements it publishes
It involves comparing financial ratios and conducting quantitative and qualitative analyses to assess the financial health of a company
Financial statement analysis utilizes tools to understand and evaluate a company’s financial reports, including information related to assets, liabilities, equity, and revenue
It identifies and evaluates financial and non-financial factors that impact a company’s financial position
All these viewpoints emphasize that financial statement analysis involves assessing and drawing conclusions about a company’s financial position by using financial analysis tools Financial statement analysis provides valuable information not only for management within the enterprise but also for other interested parties, including:
Suppliers of capital are the group with the most essential and timely information needs Therefore, if financial reports meet the information needs of this group, they also fulfill the majority of information needs of other users of financial reports The information that current and potential investors as well as creditors are interested in is useful for making decisions about providing resources to the reporting entity The benefits that investors and creditors expect depend on the evaluation of the value, timing, and prospects of future net cash flows generated by the entity Additionally, information about the fulfillment of managerial responsibilities is also valuable for the decision-making of current investors and creditors
Firstly, internal stakeholders of the business:
- For business managers, their primary concern is seeking profit and debt repayment ability to ensure the survival and development of the business Furthermore, managers are interested in other objectives such as creating jobs, improving product quality, contributing to social welfare, and environmental protection Financial statements provide information to help them set goals for the business, evaluate the implementation process of those goals, make decisions, and adjust activities for maximum efficiency Additionally, through transparently providing information, managers convince investors and creditors that they will provide the highest profit with the lowest risk Information in financial statements helps managers answer questions such as: What are the economic resources (assets) of the business? Is there excessive or insufficient inventory? What is the status of the business's debt? How likely is the business to recover its debts?
Secondly, external stakeholders of the business:
- Investors (shareholders): They are concerned about the ability to generate revenue, the safety of their investment capital, the ability to repay loans, and profit- sharing to decide whether to maintain or divest ownership Therefore, financial statements provide consolidated financial information for investors to monitor whether managers are fulfilling signed contracts Additionally, investors require financial information to make investment decisions
- Creditors, suppliers: They are interested in the business's ability to repay debts, asset liquidity, and long-term financial stability They need financial information to decide whether to expand credit relationships, continue lending, or allow the business to purchase goods and services on credit
- Regulatory agencies such as tax authorities, statistical offices: They are concerned with whether the business complies with principles and laws Financial statements assist in performing the macro functions of the state, helping regulatory agencies monitor business activities, and providing a basis for tax authorities to determine the amount of tax the business must pay
- Independent auditors: Auditors verify and provide independent opinions on the fairness and reasonableness of information in financial statements prepared by the business Therefore, financial statements serve as the subject of independent auditing, aiding auditors in issuing audit reports to reassure investors and creditors about the information on financial statements for decision-making
2.1.2 Objectives of financial statement analysis
Financial statement analysis is the process of using appropriate analytical techniques to process documents from financial statements and other materials, forming a system of financial indicators and predicting financial potential in the future
Thus, financial statement analysis primarily involves converting financial data in financial statements into useful information This process can be carried out in various ways depending on the analyst's objectives Financial statement analysis is used as a fundamental tool in investment decision-making, and it is also used as a predictive tool for future financial conditions and outcomes, serving as an evaluation tool for corporate managers Financial statement analysis will generate systematic and scientific evidence for managers
Financial activities of businesses involve various stakeholders, from managers in the business to investors, banks, suppliers, state regulatory agencies, and more Therefore, the analysis objectives for each stakeholder differ Financial statement analysis of a business must achieve the following basic objectives:
Firstly, accurately assess the financial situation of the business from various perspectives such as capital structure, assets, liquidity, cash flow, asset utilization efficiency, profit generation capability, financial risks, etc., to provide information for all stakeholders interested in the company's finances, including investors, creditors, tax authorities, and employees
Secondly, guide the decision-making of stakeholders in a direction appropriate to the actual situation of the business, such as investment decisions, financing, profit distribution, etc
Thirdly, serve as a basis for financial forecasting, enabling financial analysts to predict the financial potential of the business in the future
Finally, serve as a tool for controlling business operations by checking and evaluating actual performance indicators against planned targets, budgets, standards, etc This helps identify strengths and weaknesses in business operations, contributing to making necessary decisions and actions to improve business performance
2.1.3 Significance of financial statement analysis
For each individual associated with their respective interests, the need for using financial information from businesses varies Therefore, the significance of financial analysis can be divided according to different stakeholders a Significance of financial statement analysis for business owners
Business owners are typically the managers responsible for directly managing and operating the business Due to their position within the company, they have a lot of useful information to support the process of analyzing the company's financial statements
- Establishing cycles to evaluate the effectiveness of each business activity and adherence to financial management principles, financial efficiency (profit), and the ability to manage financial risks and liabilities of the business
- Ensuring that the decisions of the board of directors regarding investments, financing, and profit distribution are accurately implemented and aligned with the reality of the business
Financial statement analysis process
The process of analyzing a company's financial statements can be flexible and adjusted depending on the purpose and scale of the business
Here are the 5 steps of analyzing a company's financial statements:
- Step 1: Planning the analysis Planning the analysis involves determining the content, scope, time, and organization of the analysis
+ Content analysis needs to clearly define the issues to be analyzed: whether it involves the entire financial activities or specific issues such as capital structure, liquidity, etc This serves as the basis for developing a specific outline for analysis
+ The scope of analysis can be the entire entity or specific units selected for analysis; depending on the requirements and practical management, determine appropriate content and scope of analysis
+ The designated time in the analysis plan includes both preparation time and analysis time
+ In the analysis plan, responsibilities should be assigned to departments directly involved in the implementation and supporting departments for analysis; as well as various forms of analysis meetings to gather multiple opinions, assess the actual situation accurately, and identify potential for the business to strive for high results in business
In financial analysis, analysts must collect and use information from both internal and external sources
+ Financial information: To obtain financial information, detailed financial plans and summaries, financial statements, management accounting reports, and related accounting documents need to be collected
+ Non-financial information: Business development is influenced by various factors within and outside the company Financial analysis focuses on the future of the business Therefore, in addition to current and past financial information, financial analysis of the business must use a lot of non-financial information: General economic, political, legal environment information; industry information in which the business operates; business-specific information
- Step 3: Identifying distinctive characteristics Based on the collected information, depending on the analysis requirements and content, the analyst needs to calculate appropriate financial ratios, create tables according to the predetermined content, compare with previous period indicators, industry indicators, indicators of other companies in the same industry Based on that, evaluate the overall strengths and weaknesses of the business, identify issues, and focus areas that need to be analyzed further
- Step 4: Analysis All fundamental contents and issues considered important, which significantly impact the current and future financial status of the business, are focused on for specific analysis to clarify relationships and internal factors' essence through:
+ Identifying influencing factors, examining the relationship between individual factors
+ Determining the level of influence of factors on the analysis indicators + From the perspective of each factor's influence, evaluate the reasons for success and existing factors
- Step 5: Synthesis, Evaluation, and Forecasting:
+ Synthesizing analysis results: Summarizing strengths, weaknesses, opportunities, and challenges regarding the company's finances
+ Financial forecasting: Based on the analysis of current financial indicators, making forecasts about the company's financial situation in the future
+ Risk assessment: Evaluating risk factors that may affect the company's finances and providing analysis and proposals to minimize risks
Sources of information used for financial statement analysis
Financial statements are the primary source of data for analyzing a company's finances Within the financial reporting system, the Balance Sheet and the Income Statement are two core documents Additionally, the Cash Flow Statement and the Notes to Financial Statements also provide crucial information for use in financial statement analysis
2.3.1 Information source from the balance sheet a Concept:
The Balance Sheet is a comprehensive financial statement that reflects the overall value of the assets currently owned and the sources of those assets' formation of the enterprise at a certain point in time The figures on the Balance Sheet indicate the total current value of the company's assets according to the structure of assets and the structure of the sources of capital forming those assets Based on the Balance Sheet, one can observe and evaluate the overall financial situation of the enterprise b Content of the Balance Sheet:
Under the current accounting reporting regime, the structure of the Balance Sheet is divided into two parts: Assets and Liabilities and Equity and is designed in a single-sided or double-sided format
The Assets section of the Balance Sheet reflects the total current value of the company's assets at the reporting time according to the structure of assets and the form of existence in the business operations of the enterprise Assets are arranged in order of decreasing liquidity or the length of time it takes to convert assets into cash The Liabilities and Equity section reflects the total sources of formation of the current assets in the company at the reporting time The types of sources of capital are arranged according to the company's responsibilities in using capital for creditors and shareholders c Significance of the Balance Sheet:
The Balance Sheet is significant both economically and legally
Economically, the Assets section provides analysts with a comprehensive view of the scale and structure of the company's assets Meanwhile, the Liabilities and Equity section reflects the sources of funding for the company's assets, helping to assess the company's financial situation
Legally, the Assets section shows the value of the assets currently managed and used by the company for long-term profitability Meanwhile, the Liabilities and Equity section shows the company's responsibilities and obligations regarding the total business capital, including both creditors and shareholders
The balance sheet provides comprehensive information about the mobilization and utilization of a company's capital, playing a crucial role in analyzing the financial situation of the business
2.3.2 Sources of information from the income statement a Concept
The income statement, also known as the profit and loss statement, shows the balance between income (revenue) and expenses for each accounting period This report reflects the overall situation and results of production and business activities by type during an accounting period and the fulfillment of obligations to the state The report is also used as a guide to assess how the enterprise will operate in the future b Content and Structure
The figures on the income statement are detailed according to three types of activities: Sales activities, Financial activities, and Other activities
- Sales activities: These are activities related to the production and business tasks as registered by the enterprise The results of production and business activities are determined by the formula:
- Financial activities: These are activities related to investing the company's capital externally, such as trading securities, investing in joint ventures, lending, or leasing fixed assets The results of financial activities are not calculated separately but are calculated together with sales activities to form the business profit Business profit is determined as follows:
- Other activities: These are activities outside of production and business activities and financial activities of the enterprise and usually occur unexpectedly, such as liquidation activities, disposal of fixed assets, provisions for inventory depreciation and difficult-to-collect receivables, other income, and expenses c Significance
The income statement plays a crucial role in evaluating the business results and managing the operations of the enterprise Through this report, managers can check the implementation of income and expense plans and the results of each type of activity as well as the overall results of the enterprise
The figures in this report are also the basis for assessing the business activities' trends over the years and forecasting future activities The income statement provides information to evaluate the efficiency and profit-making ability of the enterprise, thereby supporting investment decisions of investors This is one of the valuable sources of information for external parties to evaluate the enterprise before making investment decisions
2.3.3 Sources of information from the cash flow statement a Concept
The cash flow statement is a consolidated report on the company's cash inflows and outflows over a specified period The cash flow statement also shows changes in the liquidity of assets, the ability to convert into cash, and the ability to pay b Content and Structure
Cash flows in the cash flow statement include:
- Cash flows from operating activities: Including receipts and payments related to production and consumption activities of the enterprise
- Cash flows from investment activities: Including receipts and payments related to investment activities such as buying or liquidating fixed assets and long- term financial investments
- Cash flows from financial activities: Including receipts and payments related to capital mobilization activities from creditors and owners, repayment of debt to creditors, share buybacks, dividend payments to shareholders c Significance
The cash flow statement is crucial for every business, helping managers understand and analyze in detail the cash inflows and outflows of the company
Through this report, managers can understand the relationship between net cash flow and profit and clearly reflect why there is a difference between cash inflows and outflows The cash flow statement also helps business management balance revenue and expenses more effectively
Additionally, this report helps managers accurately assess the company's ability to generate cash from internal or external factors in the future, the ability to repay debts on time, as well as the need for additional capital for the enterprise
2.3.4 Information Source from the Notes to Financial Statements a Concept:
Methods of Financial Statement Analysis
There are several methods of financial statement analysis, including comparative method, balancing method, exclusion method, etc Each of these methods is flexible and used appropriately for different analysis content, to evaluate the financial situation of the business from various perspectives and meet different evaluation purposes
The comparative method is an important and common method in business analysis in general and financial statement analysis in particular It is applied throughout the entire analysis process, from collecting documents to the end of the analysis process
The purpose of the comparative method is to clarify differences or specific characteristics of the research object, thereby providing stakeholders with a basis for decision-making
When using the comparative method, attention should be paid to the following issues:
- Ensure the consistency of research indicators in terms of economic content, time, calculation method, and unit of measurement
- Identify the comparison base: the comparison base can be selected based on time or space, depending on the purpose of the comparison process The analysis period can be the analysis period, the planning period, or the previous business period
- Compare between actual figures of the analysis period and actual figures of the previous business period to identify trends in the financial activities of the business and evaluate the current phase of financial activities
- Compare between actual figures of the analysis period and planned, predicted, or normative figures to evaluate the level of completion of the set plan
- Compare the figures of the business with the average figures in the industry or of other businesses to evaluate the financial situation of the business, whether it is good or bad
- In the comparative analysis method, there are three main types used: comparison by absolute number, comparison by relative number, and comparison with average figures
∆A-A0 Where A1: value of the analyzed indicator A0: value of the original indicator
Comparison by absolute number reflects the scale of the research indicator, so when comparing by absolute number, the analyst will clearly see the scale fluctuation of the research indicator between the analysis period and the original period
- Comparison by relative number is a method of determining the percentage (%) ratio of an analyzed indicator compared to an original indicator Unlike comparison by absolute number, when using this method, managers can understand more about the structure, relationship, growth rate, prevalence, and trend of fluctuations of economic indicators
In financial analysis, there are several types of relative numbers that are commonly used For example, dynamic relative numbers reflect the rate of change or growth of an indicator The planned relative number indicates the level and tasks that the business needs to accomplish in a period with a specific indicator The realized relative number evaluates the level of implementation of the business in the period, compared to the original implementation, to determine the percentage achieved
- Comparison with average figures is another method, it shows the level of the unit achieved compared to the overall average of the industry, region, or overall Thus, managers can determine the current position of the business in a broader context
It is important when using these comparative methods to ensure consistency in defining, calculating, and measuring units of indicators to ensure accuracy and objectivity in the financial analysis process
Application of basic techniques of comparative method:
- Horizontal analysis: Horizontal analysis of financial statements involves comparing specific items in financial statements across multiple accounting periods There are two ways to perform comparisons: comparing by quantity and comparing by percentage of items over time Horizontal analysis helps analysts assess the overall trend of financial indicators, thereby understanding the current financial situation
- Vertical analysis: This is the process of comparing individual figures to a specific figure in the financial report Comparisons are made using percentages and express each item on the report as a structural ratio to a selected item as a base with a ratio of 100% This method focuses on comparing several items to a fixed item in the same accounting period The results of these percentage calculations are called scale reports
Using the vertical comparison analysis method helps bring indicators to the same comparison condition, making it easy to perceive the structure of each indicator compared to the whole, whether they increase or decrease Users often expand vertical analysis by comparing analyses across multiple different periods This may show trends and provide useful information in the decision-making process
- Comparative analysis identifies trends and relationships between indicators: Individual indicators or total indicators in financial statements are considered in relation to indicators reflecting overall scale, and they may be considered in multiple periods to better reflect the development trends of economic and financial phenomena
Here's the translation of the provided text into English:
2.4.2 Method for determining the impact of factors on analytical indicators
This method is used to identify trends and the specific influence of each factor on the fluctuations of each research indicator
Successive Replacement Method: To determine the degree of influence of each individual factor on a phenomenon or business operation process, we use the successive replacement method To evaluate the level of influence of any factor on a specific result indicator, it is necessary to calculate two assumed values of that analytical indicator (replacements)
In the first replacement, we take data from the analysis period (actual) to consider the influence of a specific factor In the second replacement, we take data from the base period (plan)
Content of Financial Report Analysis
2.5.1 Environmental Macro Analysis 2.5.1.1 PEST Model
The PEST model (Politics, Economic, Social, Technology) is a model for analyzing external factors affecting a business This model helps assess the impact of key political, economic, social, and technological factors on the strategic management and development of the enterprise
- Origin of the PEST model:
The PEST model (Political, Economic, Social, and Technological analysis) was developed and applied in the field of strategic management of organizations in the early 1960s Aguilar (1967) was the first to study tools and techniques in macro- environmental analysis with four original factors: economic, technical, political, and socio-cultural, initially called ETPS (Economic, Technological, Political, and Social environment)
Subsequently, Arnold Brown restructured this model into STEP (Strategic Trend Evaluation Process), focusing on evaluating strategic trends
However, the PEST model truly attracted the attention of researchers, strategic managers, and businesses in the 1970s This model was recognized for its ability to impact the effectiveness of environmental strategy assurance
- Political Factor in the PEST Model:
The political factor in the PEST model plays a crucial role in influencing various important areas of social life, including education, social labor, economic foundations, and infrastructure There are several key political factors to consider:
Political Stability: Political stability is primarily related to political conflicts and diplomatic activities of legal entities Political stability creates favorable conditions for business operations, while political instability can create uncertainty and risks for enterprises
Government Intervention Level: The government is not only a controlling and encouraging factor but also a provider of public services to businesses Understanding the level of government intervention in various areas helps businesses operate smoothly and adapt to government policies and regulations
Legislation: Laws such as investment laws, taxes, labor laws, environmental laws, and trade policies, industry development, competition regulation, and consumer protection policies create a fair and sustainable business environment Understanding and complying with the law helps businesses take advantage of legal provisions and also formulate appropriate policies to minimize risks due to lack of legal understanding in business operations
- Economic Factor in the PEST Model:
The economic factor in the PEST model has direct and continuous impacts on the operations and development of businesses (Gillespie, 2007) Economic factors in the PEST model include:
GDP Economic Growth: National income growth can drive demand for a company's products and services A growing economy provides more development opportunities than a stagnant economy
Monetary Policies and Exchange Rates: Exchange rates and monetary policies can affect a company's exports and imports A strong currency can make exports more difficult, while a weak currency can boost exports Monetary policies also affect foreign investment
Market Orientation: Market orientation towards capitalism or socialism in each country creates different business environments for enterprises
Interest Rates and Interest Rate Trends: High interest rates can hinder investment because businesses have to pay higher interest rates for borrowing capital
In addition, high interest rates can also reduce consumer demand and create savings pressure for consumers
Inflation: The inflation rate affects labor costs and production costs for businesses High inflation can increase labor and raw material costs, posing difficulties for businesses
Economic Development Level: The economic development level of a country affects the business environment High economic development provides favorable conditions for business development, while low economic development can create difficulties in survival and competition
Infrastructure and Natural Resources: Infrastructure plays a crucial role in supporting business operations A developed and modern infrastructure helps businesses access resources, transport goods and services conveniently Abundant natural resources provide raw materials and energy for industries, especially in strategic industries
- Socio-cultural Factor in the PEST Model:
The socio-cultural factor in the PEST model significantly affects the activities of businesses Below is a rewritten passage describing these factors:
Cultural Standards and Values: Sociocultural standards and values shape the way workers live and work, as well as determine consumer needs and product acceptance Businesses need to understand these standards and values to develop and access markets efficiently
Population and Population Structure: Population and age structure in society have a significant impact on consumption trends Population information provides businesses with strategic product and service directions For example, an aging population may create high demand for health care products, while demand for toys may decrease
Urbanization Rate: High urbanization rates create changes in socio-cultural factors and make society more integrated with the international market This affects consumer standards, viewpoints, and needs, creating opportunities and challenges for businesses
Attitude towards profession: Attitude towards each profession influences the perceptions of both workers and consumers towards businesses in that industry This attitude can create advantages or challenges for businesses in manufacturing and service provision
- Technological factors in the PEST model have a significant impact on business operations Below is a rewritten passage to describe these factors:
Advanced Technology: New technology helps reduce costs, enhance quality, and promote innovation Technological advancements and engineering improvements create new products and processes For example, online shopping, encryption, and computer-aided design have improved the business environment These developments benefit both consumers and businesses providing products
SUMMARY
The theoretical foundation of financial analysis of enterprises helps us grasp the theory of the financial situation of enterprises, from concepts to significance, methods, and content of analysis We can apply theory combined with knowledge imparted by teachers to analyze the financial situation of Manabox Vietnam Company in a rigorous and effective manner.
Introducing Manabox Vietnam Co., Ltd
International name: MANABOX VIETNAM COMPANY LIMITED Abbreviated name: MANABOX VIET NAM CO., LTD
Tax code: 0106785090 Address: Room 701, 7th floor, 3D center building, 3 Duy Tan, Dich Vong Hau ward, Cau Giay district, Hanoi city, Vietnam
Representative: Tomohiro Sugeno - General Director at Manabox
● Born in 1979 inNippon Matsu-shi, Fukushima
2006 – 2013: Worked at Misuzu Auditing Company, later transformed into PwC: performing independent audit and internal control activities
2013 – 2016: Head of financial accounting department of a Japanese company in India
2016: Joined Manabox as Operations Director 2018: Officially appointed as General Director at Manabox Vietnam 2020: Create the Mangalabo system, specializing in providing in-depth information about management, accounting - Tax in Vietnam exclusively for Japanese directors
Founder: Yoshinao Nagai – CEO/Founder of Manabox
Hanoi office representative manages more than 500 consulting clients of Japan's first and largest tax accounting consulting company in Vietnam
Established Manabox in Japan and invested in establishing Manabox Vietnam in 2015 Operation date: February 6, 2015
Type of enterprise: Limited liability company with 2 or more members outside the state
Parties participating in the establishment include:
Vietnamese side: Ms Nguyen Thi Loan, Vietnamese nationality contributed 194,584,400 VND (30%) in cash
Foreign party: MANABOX CO.,LTD with business code 0124-01-025590 and
Address at 3-11-28 Koganei-shi, Nukuikita-machi, Tokyo, Japan contributed 403,674,000
Dong (accounting for 66.5%) in money Mr Yoshinao Nagai, a Japanese national with passport number TZ1218612 and address at 6-8-1, Kakikara-machi, Nihonbashi, Chuo-ku, Japan contributed 21,246,000 VND (accounting for 3.5%) in money
ManaBox Co., Ltd was established in July 2014 in Tokyo, Japan by Mr Yoshinao Nagai With the goal of becoming a pioneering enterprise in creating a platform to support customers in improving management efficiency and human resource quality to maximize the effectiveness of customers' available resources
In 2015, Manabox Vietnam Co., Ltd was officially established After 6 years of establishment and development, Manabox Vietnam has gained the trust of more than 200 customers from FDI enterprises in many different fields and industries All members continuously accumulate experience and continuously develop professional capacity in the process of providing services The company's customers are provided with services based on the B-O-T (Build-Operate-Transfer) process Not only does the company provide services, the company also aims to transfer the process to customers
The main services provided by Manabox Vietnam Co., Ltd are as follows: a Investment and promotion commercial
- Support in arranging and selecting survey locations
- Support estimates and business planning
- Support and establish a company management system: Develop processes
- standard forms, standard job descriptions
- Providing business management software - Knowledge Box
- Accounting services - Tax - Financial reporting - Tax risk control c Training and consulting on human resource development
- Provide KIP-test to simulate accounting capacity assessment
- Accounting and tax training for Vietnamese people Organizing courses from basic to advanced training for accountants who want to improve their capabilities, courses specifically for people without expertise but who want to understand more about accounting
-Human resources consulting (building a working environment, soft skills training, working rules, )
2.1.4 Organizational structure and apparatus of the unit
The organizational structure of Manabox Vietnam Co., Ltd includes: General Director and Operations Director along with affiliated corporate customer support and consulting departments, accounting and auditing departments During the internship period, I had the opportunity to practice in the accounting and auditing department
Table 1 Management organization of Manabox Vietnam Co., Ltd
(Source: Marketing Department of Manabox Vietnam Co., Ltd.)
Board of Directors: Has the highest power and highest responsibility before the State management agency The Director's Department includes the Director and Deputy Director, performing general organization and management of all issues related to the company's production and business activities, negotiating and signing sales contracts of the company company
Marketing Department: Under the direct direction of the Board of Directors, this department carries out all business work, finds partners, and organizes the purchase and sale of goods The head of the department is the Marketing Department, responsible for supervising and deciding on all work in the department
Consulting department: provides consulting and support services for individuals and businesses on issues related to taxes and financial services Their main job is to answer customers' questions about compliance with tax regulations and help customers optimize tax payments
Accounting - Finance Department: Under the direct direction of the Board of Directors, the Finance and Accounting Department is responsible for performing all operations related to the company's financial accounting work such as: revenue operations expenses, monitoring import and export of goods, issuing invoices, calculating profit and loss, finalizing taxes, calculating taxes payable to the State
At the end of each month and each quarter, the accounting department reports to the Director on business results business and prepare financial reports to submit to state agencies The head is the Chief Accountant, managing the departments depending on each person's work.
Analyzing financial statements of Manabox Vietnam Co., Ltd
The analysis contents of Manabox Vietnam Co., Ltd.'s financial statements were collected by the author from the Company's financial statements for 3 years from 2021 - 2023
To have an overview of the business's macro environment, I use the PEST model, a strategic analysis tool used to evaluate factors influencing the external environment for Manabox Co., Ltd Vietnam PEST stands for four main factors that need to be considered: Political, economic, social, technological
The legal environment for the industry's operations is relatively complete and clear, consistent with Vietnam's conditions, international practices, principles and standards Vietnam has issued the Law on Independent Auditing (2011) and the amended Law on Accounting (2015) The Government has approved the "Vietnam Accounting and Auditing Strategy to 2020, vision to 2030", This is a favorable and prerequisite condition for the Vietnamese Accounting and Auditing industry to operate effectively, Integrate deeply with the world and region
Since important trade agreements officially took effect,Besides new opportunities, Competitive pressure in the accounting and auditing market will be more intense when there are foreign auditing firms
Recently, although there have been many efforts in building a legal basis, the system of legal documents on Accounting and Auditing services in Vietnam is still incomplete and lacking stability and not fully consistent with international commitments For example, Accounting Standards are outdated and not updated compared to international accounting practices and standards; The system of issued Auditing Standards is lacking; The implementation of commitments on the presence of natural persons has not been clearly and detailedly regulated When the new generation FTA agreements officially operate, shortcomings in the legal system will be an obstacle big obstacle for Vietnamese businesses and workers
Vietnam's audit industry also faces fierce competition with human resources from countries participating in new generation FTAs To work in an international environment requires workers to have qualifications that meet international standards, in-depth knowledge, and professional and effective working methods However, Vietnam's current team of accountants and auditors still lacks both quantity and quality compared to international standards
That reality requires auditing companies to focus more on improving audit quality, enhancing training and updating staff, especially skills in preparing working documents, collecting Collect audit evidence and issue an audit opinion in compliance with the requirements of auditing standards
As of December 1, 2021, there are 210 auditing enterprises stretching from provinces and cities from North to South, with 2,519 people holding Vietnamese auditor certificates
According to the General Statistics Office (2023), the average consumer price index (CPI) in the fourth quarter of 2023 increased by 3.54% compared to the fourth quarter of 2022 For the whole year 2023,CPIincreased 3.25% over the previous year, reaching the target set by the National Assembly In particular, the price index of other goods and services increased by 4.65% (impacting the CPI by 0.16 percentage points), mainly because from July 2023, health insurance services will increase according to the new base salary
Regarding GDP usage in 2023, final consumption increases by 3.52% compared to 2022, contributing 41.04% to the overall growth rate of the economy Overall, in 2023, the whole country will have 217.7 thousand newly registered businesses and return to operation, an increase of 4.5% compared to the previous year;
On average, each month there are 18.1 thousand new businesses established and returned to operation The number of businesses withdrawing from the market was 172.6 thousand, an increase of 20.5%; On average, 14.4 thousand businesses withdraw from the market every month
Many businesses returned to operation or increased their business significantly This recovery will often be accompanied by increased demand for financial and accounting services to optimize the operations of businesses
Interest rates and monetary policy
On December 14, 2022, the Fed continued to increase interest rates by 0.5%, a slower pace than the previous 3 increases The Fed is expected to raise interest rates to 4.75 - 5% in the first quarter of 2023 and it will take a long time to cut this interest rate For the Vietnamese economy, the Fed continuously raised interest rates, which had a strong impact on the currency market and the value of the Vietnamese Dong (VND) In one month, from the beginning of October 2022 to November 3, 2022 compared to the end of September 2022, VND has depreciated by 4.1% compared to
USD, cumulatively from the beginning of 2022 to November 3, 2022 , VND has depreciated about 8.8% on the official market As of December 8, 2022 compared to the end of 2021, VND depreciated by 4.29% compared to USD It is forecast that for the whole year of 2022, VND will lose value by about 4 - 5% compared to USD The increase in value of the USD compared to other currencies can bring a few disadvantages:
+ Impactarrive demand and economic growth: A rising dollar can increase the cost of using accounting services This can put pressure on small and medium-sized businesses, reducing demand for this type of service when they have to consider saving costs and using quality accounting services
+ Impact on market psychology: Increasing interest rates can signal to the market that monetary policy is tightening and the economy is continuing to enter a recession This could reduce investor confidence and create volatility in financial markets
+ Loan prices increase: When the Fed raises interest rates, loan interest rates increase in banks This leads to increased capital costs for businesses, increasing capital prices can lead to increased service prices to compensate for higher capital costs Businesses or individuals using accounting services may have to pay more for services such as auditing, tax consulting and financial management This could influence the spending decisions of businesses and individuals and have a significant impact on the economy
After more than 25 years of development, Vietnam's independent audit industry has affirmed its indispensable role in the market economy and become an important component of the economy's macro management tool system - Finance, playing an active role in serving economic development Through initial "surprises", the market has formed with the participation of many of the world's leading auditing firms (Deloitte, KPMG, E&Y, PwC), and the boom from the period of state-owned enterprise transformation to joint stock companies and the sublimation of the stock market From 2 accounting and auditing service enterprises according to Decision No
165 TC/QD/TCCB dated May 13, 1991, Vietnam Auditing Company - VACO (now Delloite Vietnam) and Financial Consulting Services Company Accounting and
Auditing - AASC was born and put into operation Up to now, the country has more than 140 auditing service businesses with impressive revenue
Picture 1 Revenue ratio by type of service of auditing companies
According to the figure above, in 2018 the proportion of revenue from financial statement auditing services dominated, in which the revenue of Vietnamese SMEs was still modest
Evaluate the financial situation of Manabox Vietnam Co., Ltd
The increase in the size of the company's capital resources is a positive sign and shows that the company has applied an effective capital mobilization policy The use of loans can bring benefits: financing short-term activities and business expansion, daily expenses, infrastructure upgrades
In addition, raising capital from loans also helps position the company in the market and creates momentum for competition If a business is able to use loan capital effectively, it can enhance competitiveness by enhancing service and product quality, improving business efficiency, or offering more competitive prices This helps the company attract more new customers and retain old customers
2.3.2 Limit a Regarding asset structure and asset utilization efficiency
Between 2021 and 2023, cash and equivalents and receivables increased, demonstrating high liquidity Part of the reason for this situation may be because the company is collecting debts from customers to improve cash flow and enhance payment ability, leading to fluctuations in receivables
In addition, the number of total asset turnover in recent years has fluctuated slightly and decreased, showing that the company has invested more in receivables, reducing the efficiency of capital use and the ability to pay debts As for the profitability ratios, there has been an increase over the past three years, but the increase is not significant and is still recovering Notably, the company's profit after tax increased sharply The reason is that profit after tax increased while net revenue increased slightly in 2023 Average equity increased slightly, while average total assets also recorded an increase due to a fairly uniform increase in total assets assets over the years Enterprises currently do not have effective measures to improve asset utilization and fixed asset operations are not synchronized b Receivables
Other receivables increased gradually over 3 years and the reason may be due to some new policies and services that the company applied to attract new customers and retain old customers Based on these new service packages, customers can pay later for their services This easily exposes businesses to financial risks c Solvency
As mentioned, the immediate payment ratio and quick ratio have many fluctuations but generally decrease in 2023, both stopping at low levels This not only makes it difficult to pay short-term debt, but also faces high risks in the overall ability to pay short-term debt To minimize payment risks, businesses need to take timely measures to improve their financial situation such as enhancing customers' ability to pay in cash
At the same time, reducing receivables turnover is also an issue that needs to be resolved because it brings significant financial risks to businesses The company needs to improve appropriate credit management processes and tighten debt collection to avoid unrecoverable receivables and bad debts d Profitability
Profitability on total assets, equity and revenue is still low, showing that the business's cost management is ineffective This may be because DM has not found a solution to minimize optimal costs
The rate of return on revenue of Manabox Vietnam Co., Ltd is very low, the company needs to strengthen market promotion activities to increase revenue, while saving costs and improving cost management This problem can be solved by restructuring the financial management apparatus of enterprises and applying advanced technology and investing in human resources to optimize operational efficiency
- The capital structure is not really appropriate, businesses tend to depend on outside capital because equity accounts for a less and less proportion of the total capital of the business
- The ability to pay short-term debt of enterprises is increasingly decreasing due to the sharp increase in short-term debt over the years, causing the amount of cash and cash equivalents to increase, but not significantly, causing
- Profitability on total assets, equity and revenue is still low This may be because businesses have not found a solution to minimize optimal costs
- The decrease in the immediate payment ratio is because the growth rate of short-term debt is faster and stronger than the growth rate of cash and cash equivalents indices Accordingly, the characteristics of the financial consulting service industry are:Services cannot be seen or touched like physical products, and cannot be stored and preserved like physical products They are consumed immediately when supplied and cannot be reused Therefore, inventory = 0, thereby reducing the quick ratio
- The reduction in receivables turnover may be due to some preferential policies that businesses are implementing for customers such as paying later for some types of services, causing customers to be unable to pay debts on time, leading to a situation where customers cannot pay their debts on time.
SUMMARY
Chapter 2 presented the industry's macro environment through which there was a more comprehensive view of the financial performance of Manabox Vietnam Co., Ltd Through this chapter 2, we get an overall view of the financial status of the enterprise within the scope of research From there, we can see more clearly the remaining problems at the enterprise Through analyzing assets and capital, business activities, and how the company's financial ratios have changed in the three years
2021, 2022 and 2023 From there, draw out the limitations of the business .
Solution
Some solutions to increase equity for the company may include:
Mobilizing capital from current shareholders: The company can expand the scope of ownership by inviting current shareholders to buy more stocks or shares in the company This can be done through the issuance of preferred stock or the offering of additional shares through the company's stock buyback process
Raising capital from outside investors: The company can attract capital from outside investors through issuing new shares or offering shares to investors This can be done through organizing capital mobilization rounds on the stock market or through direct agreements with investors
Increasing capital through accumulated profits: The company can increase equity through accumulating profits and dedicating part or all of these profits to reinvest in the company This helps increase the company's equity value without having to raise capital from outside
To improve management and improve the executive capacity of managers, the company needs to take the following measures:
Arrange and organize a streamlined apparatus to enhance management efficiency and proactiveness in business operations This includes adjusting organizational structures, eliminating duplication, and ensuring each person has clear responsibilities and standardized tasks
Develop training plans and improve professional qualifications for young staff This helps improve management skills, sense of responsibility, and sensitivity to market situations It is necessary to harmoniously combine classroom training and practical business activities
Supplement qualified human resources by periodically checking and assessing human resource needs Recruiting and developing talent must be done in a disciplined and precise manner, in order to create a team of employees who are capable and ready to adapt to changes and different business environments
Evaluate and adjust the company's organization and use of capital to ensure flexibility and stability in business operations First, the company needs to reevaluate its current capital structure, including the ratio between equity capital and debt capital The company then needs to manage its working capital effectively to ensure it has enough cash to carry out day-to-day business operations Finally, companies need to strengthen financial risk management by assessing and minimizing risks related to interest rates, exchange rates, liquidity and credit This helps the company maintain financial flexibility and stability, thereby creating conditions for sustainable business development
First, the company needs to create an annual cost estimate by setting goals and plans based on revenue forecasts and other factors This process helps the company have an overview of expected costs and from there, can make more effective management decisions
Next, the company needs to build an estimate based on certain norms of labor, purchased and sold goods These benchmarks can be determined based on historical data, industry benchmarks or detailed cost analyses This helps the company prepare and estimate costs more accurately Finally, to manage costs effectively, companies need to eliminate unnecessary or non-value-added costs This may include reviewing service contracts and renegotiating conditions, finding more competitively priced suppliers, and optimizing work processes to reduce time and resources consuming This way, the company can ensure every expense is used appropriately and brings maximum value to the business
Businesses need to manage costs well and improve revenue:
The company needs to have an advertising strategy suitable to its business characteristics and organize programs to attract customers To do this well, the company needs to build a qualified and professional marketing team in understanding the market, customer tastes, as well as building an impressive and unique website Enterprises need to regularly and continuously update our country's accounting regimes and services to be able to meet the increasing needs of customers, while retaining customers and gaining a reputation in the market
Businesses also need to have a team of staff to perform the task of searching and classifying customers, so that they can easily reach customers Businesses need to be flexible in devising business strategies to be able to bring increasing benefits to yourself Enterprises need to build a team of experienced employees, and create conditions for them to develop their abilities: training, skills classes constantly improve employee quality
With increasingly modern technology, businesses need to liquidate outdated assets to invest in new, more advanced assets to best meet customer needs in terms of time and product quality Products Find ways to keep costs to a minimum Need to consider carefully in rewarding, compensating
Businesses need to find many partners to supply goods to reduce GVHB Spend only when necessary, if not necessary then don't spend, if not necessary then absolutely don't spend Only then can businesses minimize their business costs Regularly implement savings and anti-waste programs Careful consideration needs to be given to rewards and compensation.
Request
Create a stable and transparent legal environment: The State needs to ensure that the legal system on business and finance is built in a clear, transparent and stable manner This helps create favorable conditions for companies to operate, while minimizing legal risks and increasing investor confidence
Simplify administrative and tax processes: The State needs to simplify administrative and tax processes, reducing risks related to understanding and implementing legal regulations This helps reduce the burden of administrative costs and enhance competitiveness for businesses
Providing legal guidance and support: The state can provide legal guidance and support to companies, especially small and medium-sized enterprises, to help them better understand legal regulations and carry them out effectively
Strengthen control and handle violations: To create a healthy and fair business environment, the state needs to strengthen control and handle violations of the law, especially in the fields of finance and business joint This helps ensure legal compliance from companies and enhances trust from the business community
Promoting public-private cooperation: The State needs to create favorable conditions to promote cooperation between businesses and state agencies in building and perfecting the legal system This cooperation helps ensure that legal regulations are designed to reflect the needs and realities of businesses, while optimizing the operational efficiency of the legal system
To improve the financial situation of Manabox company through improving the legal system, the following measures can be taken:
Enhance legal compliance: Ensure that the company fully complies with legal regulations related to accounting, finance and business management Complying with the law will help avoid legal risks and avoid fines or potential legal consequences
Optimize your tax structure: Look for legitimate opportunities to minimize your tax liability and optimize your company's tax structure This may include taking advantage of tax deductions, applying tax minimization measures in accordance with the law
Preventing legal risks: Review and evaluate legal risks that can affect the company and take preventive measures such as signing clear contracts, protecting the company's rights in legal matters commercial transactions
Optimize asset and liability management: Strengthen the company's asset and liability management to ensure efficiency and transparency in financial management This includes clearly identifying liabilities, effectively managing cash funds and ensuring flexibility in financial management
Collaborate with legal experts: Collaborate with legal experts or lawyers to evaluate and optimize the company's legal system These experts can provide in- depth knowledge and experience to help companies take the necessary measures to improve their financial and legal situation.
SUMMARY
From analyzing the financial situation of Manabox Vietnam Co., Ltd., we have seen the overall financial picture of the business Including both its own advantages and disadvantages, this is the premise for the author to provide solutions to outstanding problems affecting the company's business situation and also make recommendations to the Government water and Manabox Vietnam Co., Ltd
Based on the presented theoretical and practical basis, it can be affirmed that in the current economic context, with the continuous boom of the market and the trend of global economic integration, every business needs Conduct financial statement analysis during its operations Financial statement analysis not only has great significance but is also an important management tool for business executives Performing financial statement analysis effectively will provide them with reliable information to make optimal business decisions and the right choices
After careful research on financial reporting theory and financial statement analysis, along with practical exploration of the financial statement analysis process at Manabox Vietnam Co., Ltd., I have completed thesis "Analyzing financial statements to improve the financial situation of Manabox Vietnam Co., Ltd in the period 2021 - 2023" With his own continuous efforts in researching theoretical issues and deeper exploration of reality, along with the dedicated support of instructors, MSc
Do Thi Minh Anh, the thesis was successful in solving the company's challenges
1 Law on Accounting (2015), No.88/2015/QH13 on accounting for small and medium enterprises
2 State Audit Office (2008), Circular 01/2008/QD-KTNN on reforming to elevate the efficacy and efficiency
3 Stephen H Penman (2013) Financial Statement Analysis and Security Valuation
4 Karen P Schoenebeck and Mark P Holtzman (2019) Interpreting and Analyzing Financial Statements
5 Howard M Schilit (2020) Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports
6 The Enterprise Law No 59/2020/QH14: Regulations on the organization and operation of enterprises, including provisions on accounting and financial reporting
7 Ministry of finance (2020), Circular 59/2020/QH14 on the organization and operation of enterprises, including provisions on accounting and financial reporting
8 Ministry of finance (2015), Circular 88/2015/QH13 on accounting principles, accounting methods, and financial reporting.